TLDR
Nvidia fell 6.8% before the open after a report its board may oust CEO Jensen Huang.
CoreWeave, Super Micro and Dell dropped as investors weighed what a Huang exit means for AI.
Memory, storage and networking stocks also traded lower on Thursday.
AMD rose 3.3% and Broadcom gained 1.8%.
Strategy fell 5.4% after MSCI set new index eligibility rules.
Stock futures fell on Thursday as reports of a leadership crisis at Nvidia weighed on artificial intelligence stocks. Nvidia shares dropped 6.8% before the opening bell.
The Wall Street Journal reported that Nvidia’s board is preparing to oust CEO Jensen Huang over two extramarital affairs. The report cited people familiar with the matter.
Nvidia did not immediately respond to a request for comment from Barron’s. Yahoo Finance reported that the stock was down 8.04% in after-hours trading at one point.
Companies Tied to Nvidia Fall
Investors tried to judge what a Huang exit could mean for the AI boom. Companies that do business with Nvidia saw some of the sharpest moves.
CoreWeave, a cloud-computing provider, sank 6.3%. Server makers Super Micro and Dell fell 5.2% and 2.8%, respectively.
Memory and storage names also slipped before the open. Micron, Sandisk, Seagate and Western Digital were among the decliners.
Optical networking companies Coherent, Lumentum and Marvell traded lower as well. All of these moves came ahead of regular trading.
Some of Nvidia’s rivals moved the other way. Advanced Micro Devices rose 3.3%, and Broadcom added 1.8%.
Strategy, a Bitcoin investor, fell 5.4% for a different reason. Index provider MSCI set new eligibility rules that would exclude the company from its global benchmarks, and the change takes effect at the end of the month.
What Sparked the Selloff
The latest drop followed a New York Times report that Huang had a second extramarital affair. The report said he had a relationship with Nvidia executive Kimberly Powell.
The Times said the two were seen being affectionate at a hotel during a company conference in March. Huang is also under investigation over a separate relationship with a woman named Alice Huang, who is alleged to be a Chinese spy.
Huang admitted that affair in a memo to employees. He wrote that there is “no excuse” for what he did and that he is “deeply sorry.”
The Information reported on Tuesday that Alice Huang is believed to be tied to a network of Chinese companies. It said the network helped ship $7.5 billion in chip sales to China.
President Trump called Huang “an honorable guy.” He also said on Monday that the FBI was looking into the relationship.
In a statement on Sunday, Nvidia’s board said it has “no reason to believe that either national security or Nvidia secrets were compromised.” The Wall Street Journal reported that the board is now meeting to decide whether to remove Huang.
The post Today’s Market Movers: CoreWeave, Dell and Super Micro Slide as Nvidia Board Weighs Huang’s Exit appeared first on Blockonomi.